Monday, 12 October 2009

Down with the Pound!

FT Alphaville note the poor run on Sterling initiated today by the news the Government is to sell of assets. It all looks rather sickly, however, when you look at the trade weighted index for 1992 - the last devaluation event, it looks horrible. But it is worth mentioning that over the last 12 months the Pound has done worse than this overall, in fact, it is now below 85 on a trade weighted basis, matching this devaluation. So the only question is whether we expect a bounce or not. I think there will be, but not much of one, certainly not to take us back up 10% to 20%. Alistair Darling IS Norman Lamont.

It would be good if Darling was Lamont. Lamont is underrated: he got the shock of his life when we were ejected from the ERM, subsequently putting in place sound economic policies. The bone idle, and bone headed, complacent lump Ken Clarke took all the credit.